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1 Jun, 2017 18:57

Risk-free gambling? Play the stock market with $50k of someone else’s money

Risk-free gambling? Play the stock market with $50k of someone else’s money

Amazon engineer Mike Roberts has shaken up the online gaming industry by entrusting $50,000 of his own money for anonymous users on Twitch to play the stock market. This may be the start of a new breed of massively multiplayer online games.

“I wanted something with real-world effects, real-world consequences for what you type into that chat,” Roberts said, as cited by Kotaku.

Roberts drew inspiration from Twitch plays Pokemon, wherein over a million users from around the world played the game cooperatively via the chat function.

On StockStream, however, massively multiplayer online gaming has taken on a new edge with some real-world capital at stake.

The stock market game debuted Wednesday and is currently up, at roughly $50,130, at time of writing. Roberts provided no clear objective for Stock Stream, to pre-empt any potential trolling.

“I thought people were just gonna waste money,” Roberts told Kotaku. “That was my first thought.”

The game is controlled via the chat function on Twitch, a popular streaming site used by gamers, with commands as simple as “!sell” or “!buy” and the stock ticker all collected by the algorithm behind the game. The order and stock combination that receives the most votes every five minutes is executed.

“Before today, I was a bit skeptical — thought I might lose money quickly, but things seem OK,” Roberts told Polygon. "Now that a lot of the money is diversified, the swings in value should start getting bigger. I ran some simulations with some made-up data, and calculated that it would last at least a couple months.”

While there is no clear objective for the game, there is a well-defined ‘Game Over.’ The kill screen will be displayed when the trading account sinks below the Financial Industry Regulatory Authority (FINRA) regulated $25,000 mark.

If a day trader’s account sinks below $25,000, FINRA regulations suspend the account to prevent any crippling losses. Even if Roberts loses that much, at least it’s tax-deductible.

The gaming industry hit $91 billion in revenue in 2016 according to research by Super Data, with mobile gaming alone accounting for $41 billion.

So far, over 60,000 people have played the game with users heavily favoring orders in tech stocks, according to a spreadsheet created by die-hard players, such as Apple, Alphabet and Tesla.

Players are rewarded points (with absolutely no monetary value) depending on the outcome of their trades, if and when they are executed.

Roberts does receive a referral bonus on the Robinhood app which powers the game but claims he is running the experiment for fun rather than monetary gain.

StockStream runs based on market opening times at the NYSE, and the algorithm carries out a total of 78 trades per day.

The TwitchPlaysStockMarket account which was previously set up but has been left dormant since 2015. It did not, however, use real money.